The storm of recalling Chinese toys in large quantity has shocked the toy industry and also led to a hot discussion on the advantage and disadvantage of OEM producing. The writer holds that to improve the ratio of profit distribution, we must construct our own brand and fulfill the change from quality and price to reputation of products.

Made in China has led to deep reflection

The OEM producing of toys is just serving for others rather than receiving. Many senior personnel are worried that Chinese enterprises will become a pigmy that can never grow up under the control of the multinational corporations. It may become an eternal minor role or bridesmaid in the marriage of product and market and can never be able to walk on the red carpet to become the main role---bride.

“Recall” reflects the brand defects of our products as well as makes us deeply realize the “diving phenomenon” of the physical share and value share of the OEM products. The selling flow of these products obstructs our chain of profit. The flow is “manufacturers-domestic trading company- abroad importers-domestic dealers-domestic big wholesalers-distributors-retailers-consumers”. Counting as this, we could only get 6% profit. We can imagine, under the “multi-middleman mode”, our manufacturers can only obtain an extreme small part of chain which is from producing to selling of all the products. Although the craft of our self-produced doll series is very elaborate, the price and selling amount and brand influence still can not catch up with Barbie, which is the same produced in domestic but with abroad brand. It shows that although they are the same types of products, the high-income group would like to buy higher price and stronger brand goods while the lower-income group prefers to buy lower price goods in the commodity markets in the way of bargaining. In 2006, the average GDP per capita in our country is ￥15070, or $1860 and that of America is $42000, which is 24 times of us. It is our important target to promoting our independent brand to the developed countries to get huge profit. This demands us to own a team of big enterprises, big brands and big groups.

The toy production needs new style of marketing

Brand marketing and market marketing are just like boating against the current, not to advance is to go back. For the both enterprise and brand, they must maintain high sensitivity to the trend of the time and society in order to stand stead. Companies like this, their brands and market value can lasting improve. After doing decades of Barbie dolls, Mattel also feels that it is rather difficult for the dolls of generations to go on to be popular.  So the single girl leads to a handsome boyfriend “Ken” whose appearance is changing with the time. Till 2004, Barbie parted with her 10 years boyfriend which shows that Mattel ’s Barbie has entered a new theme. The following is Barbie falls in love with a surfing young man from Australia whose name is “Brane’. We can see from another aspect that Mattel is progressing with the time on Barbie. In last July, Mattel made a new attempt and promoted MP3 series products of Barbie which integrated with the internet. As we know, the sale of children electron products increased by 16% in the first half of 2007.

A Hong Kong company independently innovates and designs the first new pattern of soft toy bricks in the world which is different from the conventional ones. It not only surpasses the personalities of the traditional products but also covers the effects that the traditional ones cannot reach. It contains more DIY elements and the materials it used are completely no harm to children. The children can also assemble them at will according to their imagination which is very beneficial to the exploitation of their brain and thought. The biggest advantage is that the designing style is more humanism in the aspect of protecting the body of children. It also embodies that the Chinese toy industry now has more creating enthusiasm and responsibility of establishing independent brand.

Construct brand through marketing

If the product can not win reputation, it is only a common product. Only the product that owns reputation can bring market share and profit to the enterprise.

If there is no reputation as the basis, brand is a name of sign and has no any special meaning. Only the brand with reputation can own brand value. The higher the reputation is, the bigger the brand value is; the longer the reputation lasts, the higher the brand value is.

From the makeup of brand, it closely connects with reputation. On individual, what supports the brand is product with reputation; on the whole, what supports the products is the product’s reputation.

So with the reputation or not and the reputation’s high or low are the key elements of deciding the brand value and product status. The logical relationship is: brand reputation is decided by product reputation and the product reputation is decided by product with reputation.

From the study of formation process of brand reputation, we can see a hierarchy system from low to high which is product with reputation, product reputation and brand reputation. They form a “pyramid of brand reputation”. Product reputation is the highest stage of the system and the core part that supports the whole pyramid is product with reputation.

Product with reputation is the product that can win competition superiority in the market and support the brand as well as bring reputation to all the products of the enterprise. Product reputation means the whole impression of the consumer-oriented relating people of benefit on the enterprise’ products on the basis of recognition and evaluation on the quality, ratio of quality and price and service

The constructing process of a single product with reputation is also the accumulation process of product reputation of the enterprise while the accumulation process of reputation is just the construction process of the whole brand capital. For example, if a family wants to become a distinguished family, the key is not that there are a lot of people in the family or some members’ status in it, but whether there are famous members in the family. The more the successful people are and the more distinct the achievement is, the more famous the family is. The famous and successful people are right the family’s “product with reputation” and they support the whole family’s reputation. They are “brand” that the whole families can share.

Many enterprises mistakenly think that they can improve sale through constructing brand. But the fact is that they must rely on the improvement of achievement to construct brand. And many enterprises also mistakenly think that they can make a higher price through constructing brand. But the fact is that just because of the higher price, they finally own the brand.

As the “world’ factory”, it is the only way for Chinese enterprises is to take the multi-national corporations as standard and try best to construct the same or better products. On the basis of this, they should pay more attention on the establishment of selling network, improvement of promoting ability and the establishment of marketing team and marketing mode. China’s way of brand construction is not only decided by the efforts of several outstanding enterprises, but also decided by the joint efforts of all Chinese enterprises. In domestic market, only the enterprises that can first win whole reputations can have the enterprises that can have the ability to make brand competition with the Multi-national Corporations, because only the industry with reputation can be possibly to have truly outstanding enterprises and brands. In the international market, the developing way of Chinese enterprises is to construct product reputation first and then form national brand and at last form the enterprise’s individual brand on the basis of the national brand.